Friday's Winners & Losers: Ambac

Shares of Yahoo!(YHOO Quote) soared 48% after Microsoft(MSFT Quote) moved to acquire the company for $31 a share in a cash-and-stock offer valued at about $44.6 billion.

The offer represents a 62% premium above Yahoo's Thursday closing price of $19.18. Yahoo's stock was up $9.20 to $28.38. Shares of Microsoft fell $ 2.15, or 6.6%, to $30.45.

According to several published reports, Standard & Poor's yesterday affirmed Ambac's(ABK Quote) crucial perfect rating while warning that it may still cut that of MBIA (MBI Quote). Moody's, for its part, has warned it will probably hit some bond insurers with downgrades this month, per several reports.

Nevertheless, Ambac shares shot up 16.5% to $13.56. MBIA, which yesterday held a marathon analyst call in an effort to assuage investors' fears following the firm's disclosure of a huge fourth-quarter loss, was adding 6.1% to $16.44.

Countrywide (CFC Quote) gained ground, as well, after fraught homebuilder Beazer Homes(BZH Quote) -- having decided to end its mortgage-origination business -- agreed to tout Countrywide to customers as its "preferred" mortgage lender.

Countrywide, itself a struggling entity, seems set to get taken out by Bank of America (BAC Quote): earlier this week, BofA CEO Ken Lewis affirmed the deal's upcoming completion at a Citigroup conference in New York. Voicing opposition yesterday, however, was 5.2% Countrywide holder SRM, which said in a regulatory filing that it believes the deal undervalues the company.

Still, the mortgage lender's shares were bouncing 47 cents, or 6.8%, to $7.43, in recent trading.

Motorola(MOT Quote) gained $1.19, or 10.4%, to $12.69 after the company set a quarterly dividend of 5 cents a share and said it is considering selling its cellphone business. The shares were also upgraded from hold to buy by an an analyst at Citigroup.

Meanwhile, Sunnyvale, Calif.-based Infinera (INFN Quote), which operates a digital optical communication system governing network traffic, saw shares take off 44.1% to $14.69 on fourth-quarter earnings. Thursday after the close, the company posted non-GAAP earnings of $15.9 million, or 17 cents a share, vs. a loss of $7.3 million, or $1.04 a share, in 2006. Analysts polled by Thomson Financial were expecting EPS of 2 cents. This morning, Jeffries affirmed the news with an upgrade to buy from hold.

Also gaining on a Thursday post-close earnings report was provider of network functions and services Starent Networks (STAR Quote). For the fourth quarter, the Tewksbury, Mass.-based company swung to a profit of $4.2 million, or 6 cents a share, vs. a loss $1.2 million, or 44 cents a share, in 2006. The Street was looking for 3 cents a share. The stock climbed 28.6% to $15.90.

Medical device maker Intuitive Surgical(ISRG Quote) said Thursday post-close that fourth-quarter net income more than doubled to $49.2 million, or $1.24 a share, from $23.6 million, or 62 cents a share, a year ago. Revenue increased 68% to $189.4 million from $112.6 million in the year-ago quarter, driven by higher use and sales of the da Vinci Surgical System. Analysts polled by Thomson Financial had estimated profit would be $1.04 a share on revenue of $175.9 million. Shares were up a whopping $51.61 on Friday, or 20.3%, to $305.61.

Also on the uptick, Affymetrix(AFFX Quote) said Thursday post-close that net income climbed to $12.8 million, or 17 cents a share, from $8.7 million, or 13 cents a share, in the comparable year-ago quarter. The company reported earning 20 cents a share when restructuring charges are factored out, on revenue of $107.6 million.

Analysts surveyed by Thomson Financial expected profit of 16 cents a share on revenue of $108.9 million. Looking ahead, the company expects total revenue in the range of $505 million to $525 million.

Shares were up $1.97, or 9.8%, to $22.03.